In the week to 22 September, ten lenders lifted 266 fixed home loan rates by an average of 0.33 percentage points, and one major bank raised its two-year fixed rate by 0.48 percentage points in a single move. None of that waited for the Reserve Bank, which does not meet until 29 September. Fixed rates often move first because they are priced on where the market expects rates to go, and understanding that helps borrowers judge whether fixing still makes sense.
What Sets the Price of a Fixed Rate
A variable rate tracks the cash rate fairly closely, because lenders usually pass on RBA changes to variable borrowers within a few weeks. A fixed rate works differently. When a lender offers a three-year fixed rate, it is committing to that rate for three years, so it prices the loan on its expected funding costs over the whole period.
The main reference point is the swap rate for the matching term, which reflects what financial markets expect the cash rate to average over that time, plus the lender’s margin and its view on competition. When markets start to expect rate rises, swap rates climb, and fixed rates follow, often weeks or months before the RBA acts.
Why the 2026 Rises Came Early
By mid-September, markets were pricing more than a 90% chance of a September rate rise, and all four major banks were forecasting at least one more increase. With that expectation built into wholesale rates, lenders lifted fixed pricing ahead of the decision. Sixteen lenders had raised at least one fixed rate in September by 22 September, according to Australian Broker, and some fixed rates at the major banks moved above 7%.
The same mechanism works in reverse. When markets expect cuts, fixed rates tend to fall first, which is why fixed rates sometimes look cheaper than variable rates just before an easing cycle begins.
Does a Rise in Fixed Rates Mean the RBA Will Definitely Move?
No. Fixed rate pricing reflects expectations, and expectations can be wrong. If the RBA holds when markets expected a rise, swap rates can fall back and lenders may trim fixed rates again. The rises are a strong signal about market sentiment, and the RBA still makes its own call on the day.
What This Means for Borrowers Thinking About Fixing
By the time the RBA lifts the cash rate, much of that rise is often already built into fixed rates. That means waiting for the RBA decision before fixing does not necessarily lock in a better or worse rate. The question is whether the fixed rate on offer today looks reasonable against your expectations for variable rates over the same term.
Fixing makes sense for some borrowers and not others. It suits those who value certainty in their repayments over the term, particularly households with a tight budget. It suits less well those who expect to sell, refinance or make large extra repayments, since fixed loans usually limit extra repayments and can carry break costs if you exit early. A split loan, part fixed and part variable, sits between the two.
How Rising Rates Affect Break Costs
Break costs are charged when you exit a fixed loan early and wholesale rates have fallen since you fixed, because the lender loses money on the funding it arranged for your loan. When rates have risen since you fixed, break costs are typically small or nil.
That matters for borrowers who fixed at low rates in earlier years. With wholesale rates higher now, refinancing or restructuring an existing fixed loan may cost less than expected, though the exact figure depends on the lender’s formula and needs to be confirmed before any decision.
Rate Locks and Timing
The fixed rate you see when you apply is not guaranteed until the loan settles. If rates rise during the approval process, many lenders apply the rate in place at settlement. Some lenders offer a rate lock for a fee, which holds the quoted fixed rate for a set period, often around 90 days.
With fixed pricing moving quickly in September, a rate lock can protect against further rises during processing, but the fee needs to be weighed against the likely change. Comparing fixed rates across lenders, and the cost of a lock at each, gives a clearer view than looking at one lender’s pricing in isolation. Our refinancing page covers the wider process of switching lenders.
Key Takeaways
- Fixed rates are priced on market expectations for the cash rate over the whole fixed term.
- When markets expect rate rises, swap rates climb and lenders lift fixed rates before the RBA acts.
- Ten lenders lifted 266 fixed rates by an average of 0.33 percentage points in the week to 22 September 2026.
- Rising fixed rates signal market expectations but do not guarantee the RBA will move.
- Break costs are usually small or nil when wholesale rates have risen since you fixed.
- A rate lock can hold a quoted fixed rate during processing for a fee, often for around 90 days.